The 7 Deadly Sins of Small-Biz Sales

By Rick Faulk & Seamas Egan
Oct 8, 2012 5:00 AM PT

Is your small business guilty as sin? Many small businesses are committing sales transgressions that hinder success and threaten to condemn them to eternal mediocrity in the market. The root of all these sins lies in a failure to adhere to the "commandment of commitment."

To stay on the right path, every business should commit to a sales process that is documented and measurable. From the small, one-person shop, to the larger organization, a formal sales process will help you avoid the road to doom and ensure that you achieve consistent performance.

The 7 Sins - and Tips for Redemption

1. Sales and marketing are not aligned on goals. Clearly align the goals of sales and marketing teams to avoid wasted time, money and unnecessary tension. Marketing and sales must be jointly committed about what types of leads will be generated and how they will be followed up.

Use a CRM system to establish a common ground where marketing and sales activities -- leads coming in and action taken -- are captured in one place. Your CRM system will also enable you to document the process in a simple way that allows both teams to see the quantity and quality of leads and the followup. This establishes accountability and teamwork as both sales and marketing work together to meet goals.

2. No differentiated elevator pitch. To sell effectively, small business owners must know the secret sauce of their business or that special differentiation that causes people to buy from them, rather than a competitor. Many small businesses have a hard time with this concept and turn to price or "good service." Your customers can provide valuable insight into your advantages. Why did they choose you? How is your process different from your competitors?

Once you have identified your differentiation, distill it into a clear message that is reinforced throughout your business. Put it on a poster on the wall, so that everyone sees and remembers it. Make sure that every sales representative has it in front of them and understands how that differentiation gives you a competitive advantage.

3. No structured sales process. Many small businesses approach the sales process in a random way, making it hard to measure and even more difficult to track and correct problems in the pipeline.

A structured top to bottom sales process allows sales managers to quickly identify and address problems. It also allows you to document a proven success formula that can be consistently implemented.

4. Managing the numbers and not the activities. Most sales managers have been trained to focus on numbers and manage against a quota. However, it is as important to manage the activities that drive the numbers.

Understanding and measuring the steps along the way in the sales process -- i.e., X number of calls or demos, contracts out in X number of days -- ensures that you can consistently manage the numbers. For example, if you know that it takes five demos a week to close one sale, you can measure whether or not that activity happened when team members do not make their quota.

5. Not knowing the core equation of the business. It is essential to know the key metrics that drive your business. Every business has a simple equation that drives business results. For example, X number of leads comes in the door, you run demos for Y, which then results in Z. Metrics such as deal size, number of sales calls and close rate are important to know.

Every small business should understand the core equation and variables, and know how to manage against those numbers. A lot of businesses go to market and don't understand this core equation and metrics that drive the business. This is a sin that is hard to correct if left untouched.

6. Not knowing when to let go. At some point in the life cycle of a small business, it will be necessary to bring in a sales professional to scale the business. It can be hard for a small business owner to let go when they have built the business from the ground up and closed every deal.

Small business owners may overlook the need to document the sales process. What steps were taken that resulted in success? What activities drive sales results? Formalizing the process will make it much easier to replicate past success and provide a foundation to build upon.

7. Selling primarily on price. The final sin is selling on price rather than value. This is also potentially the most deadly to your small business. When you are David competing against Goliath, it is easy to cut the price to get the deal. But this last resort tactic can dramatically compromise revenue and profit margins. It is the sin that no one wants to commit, yet everyone does. People are willing to pay for a brand name, but they are also willing to pay when they see value.

Small business owners must provide a solution that people are willing to pay for because they see the value in every step of the process. Develop a pitch book with one page on each of your biggest competitors. Document the gaps -- what are customers missing -- and your competitive advantage. Remember to update as competitive advantages can change over time. Taking time to establish value will ensure that you never have to rely on cost cutting to close a deal.

From Sins to Virtues

Adding structure to your sales process does not have to be complicated and does not require a lot of resources. A good CRM system can facilitate capturing and standardizing activities that will help you achieve consistent sales success.

With a commitment to the process, you can quickly turn your sins into
virtues that will have you celebrating ongoing success.

Rick Faulk joins
j2 Global as its general manager of
Campaigner with more than 30 years of experience in executive management, sales and marketing.

Seamas Egan, corporate sales manager for Campaigner, has five years of SaaS sales experience working in SMB, corporate and enterprise sales.